OECD Anti-Corruption Network for Eastern Europe and Central Asia Liability of Legal Persons for Corruption in Eastern Europe and Central Asia OECD Anti-Corruption Network for Eastern Europe and Central Asia Liability of Legal Persons for Corruption in Eastern Europe and Central Asia About the OECD The OECD is a forum in which governments compare and exchange policy experiences, identify good practices in light of emerging challenges, and promote decisions and recommendations to produce better policies for better lives. The OECD’s mission is to promote policies that improve economic and social well-being of people around the world. Find out more at www.oecd.org. About the Anti-Corruption Network for Eastern Europe and Central Asia Established in 1998, the main objective of the Anti-Corruption Network for Eastern Europe and Central Asia (ACN) is to support its member countries in their efforts to prevent and fight corruption. It provides a regional forum for the promotion of anti-corruption activities, the exchange of information, elaboration of best practices and donor coordination via regional meetings and seminars, peer-learning programmes, and thematic projects. ACN also serves as the home for the Istanbul Anti-Corruption Action Plan. Find out more at www.oecd.org/corruption/acn/. About the thematic studies on Criminalisation of corruption and law-enforcement in Eastern Europe and Central Asia The ACN Work Programme for 2013-2015 included a thematic cross-country study (review) on the criminalisation of corruption and effective law enforcement. The first topic selected for the thematic study was the liability of legal persons for corruption. Other thematic studies will concern foreign bribery and international co-operation in corruption cases. The objectives of the studies are (1) to analyse the state of play in the relevant area, in order to identify common problems and best practices (in particular, by using case studies from selected countries) and to develop regional recommendations; and (2) to identify capacity-building and training needs for the law enforcement authorities and the judiciary. This report is published on the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of OECD member countries. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. © OECD 2015 Foreword This cross-country report analyses the legislation on liability of legal persons for corruption and its enforcement in Eastern Europe and Central Asia. While the report focuses on twenty five countries participating in the Anti-Corruption Network for Eastern Europe and Central Asia (ACN), it also includes examples from OECD countries. The report is based on data provided by the ACN governments in the form of questionnaires. It also reflects the discussions and examples of good practiced that were presented during the meetings of the ACN law-enforcement network in 2014. Additional research was conducted to enrich the report with the data for the OECD countries. The majority of the report was prepared in 2014. The purpose of this report is to review trends in introducing and enforcing liability of legal persons for corruption, and to highlight national practices that may be promoted as good practice. It serves as a valuable reference point for legal reforms and reviews in this region, as well as for other parts of the world. The report is prepared as part of the OECD Anti-Corruption Network for Eastern Europe and Central Asia Work Programme for 2013–2015. It is one of three cross-country studies within the programme: prevention of corruption in the public sector, law enforcement and criminalisation of corruption, and business integrity. Table of Contents Foreword .................................................................................................................................... 3 Acronyms ..................................................................................................................................... 7 About the thematic study ............................................................................................................ 9 Introduction .............................................................................................................................. 11 1. Criminal versus administrative liability ................................................................................ 12 1.1. Terminological and historical background ................................................................................. 12 1.2. The state of play in ACN countries ............................................................................................ 13 1.3. Evaluating effectiveness – procedural aspects ........................................................................... 14 1.4. Evaluating effectiveness – deterrence aspects ............................................................................ 16 Conclusions ....................................................................................................................................... 17 2. Models of corporate liability .................................................................................................. 18 2.1. Historical background ................................................................................................................ 18 2.2. Models of liability in ACN countries ......................................................................................... 20 2.3. The persons who can trigger corporate liability ......................................................................... 21 2.3.1. Liability for the acts of a responsible person ....................................................................... 21 2.3.2. Liability for the failure to supervise .................................................................................... 23 2.3.3. Liability for the action of a related person .......................................................................... 24 2.3.4. Liability through the concept of corporate fault .................................................................. 24 2.4. Connection between the legal person and its agent’s misbehaviour .......................................... 25 2.5. Autonomous liability .................................................................................................................. 26 2.5.1. Autonomy vis-à-vis the human perpetrator ......................................................................... 27 2.5.2 Procedural autonomy ............................................................................................................ 28 3. The scope of corporate liability.............................................................................................. 30 3.1. Covered entities .......................................................................................................................... 30 3.2. Covered offences ........................................................................................................................ 32 4. Corporate liability in practice ............................................................................................... 33 4.1. General practice .......................................................................................................................... 33 4.2. Prosecuting bribery..................................................................................................................... 34 5. Sanctioning ............................................................................................................................ 35 5.1. Sanctions .................................................................................................................................... 35 LIABILITY OF LEGAL PERSONS FOR CORRUPTION © OECD 2015 5 5.1.1. Fine ...................................................................................................................................... 35 5.1.2. Confiscation......................................................................................................................... 40 5.1.3. Dissolution........................................................................................................................... 42 5.1.4. Restriction of corporate rights ............................................................................................. 43 5.1.5. Publication of judgement ..................................................................................................... 45 5.1.6. Civil law sanctions .............................................................................................................. 46 5.2. Sentencing principles ................................................................................................................. 46 5.2.1. Conditions for meting out punishment ................................................................................ 46 5.2.2. Suspended sentence ............................................................................................................. 47 5.2.3. Grounds for exemption from liability or punishment .......................................................... 48 5.3. Prosecutorial discretion .............................................................................................................